WikiLeaks founder Julian Assange is seen on the balcony of the Ecuadorian Embassy in London, Britain, May 19, 2017. REUTERS/Peter Nichollspe

Julian Assange claimed victory Friday after Swedish prosecutors dropped a seven-year rape allegation against the WikiLeaks founder, but insisted the "proper war" over his future was only just beginning.

Assange gave a clenched fist salute as he stepped into the daylight on the balcony of Ecuador's London embassy, where he has been holed up since 2012.

But the 45-year-old Australian said the road was "far from over" and declined to reveal whether he would leave the embassy after five years cooped up inside.

British police would arrest him immediately for breaching earlier bail conditions if he left the embassy, while US authorities have warned they regard WikiLeaks as a "hostile intelligence service".

"Today is an important victory," Assange told reporters and a small band of supporters crowded around the tiny balcony, after emerging wearing a black shirt and jacket.

"But it by no means erases seven years of detention without charge. In prison, under house arrest and almost five years here in this embassy without sunlight.

"That is not something that I can forgive. It is not something that I can forget."

Earlier in Stockholm, Marianne Ny, Sweden's director of public prosecutions, said the rape investigation had been dropped because there was "no reason to believe that the decision to surrender him to Sweden can be executed in the foreseeable future".

"It is no longer proportionate to maintain the arrest of Julian Assange in his absence," she said.

Despite the probe in Sweden being dropped, Assange would still face arrest if he set foot outside the embassy, a flat located just behind the plush Harrods emporium.

Assange jumped British bail by entering the embassy and claiming asylum, saying he feared he would eventually be extradited to the United States.

US justice authorities have never confirmed that they have Assange under investigation or are seeking his extradition.

But US Attorney General Jeff Sessions said last month that "we will seek to put some people in jail", when asked if arresting Assange was a "priority" for Washington.

US prosecutors have been drafting a memo that looks at charges against Assange and WikiLeaks members that possibly include conspiracy, theft of government property and violations of the Espionage Act, according to The Washington Post.

US President Donald Trump's administration has put heat on WikiLeaks after it embarrassed the Central Intelligence Agency in March by releasing files and computer code from the spy agency's top-secret hacking operations.

"While today was an important victory and an important vindication, the road is far from over. The war, the proper war is just commencing," Assange said.

He said his lawyers were in touch with the British authorities and hoped to begin a dialogue about the "best way forward".

And the former computer hacker said that despite the "extremely threatening remarks" emanating from Washington, he was "always ready to engage with the Department of Justice".

The department said Friday it had no comment "at this point" on Assange.

Asked if London would now support a request to extradite Assange to the United States, British Prime Minister Theresa May said: "We look at extradition requests on a case-by-case basis."

Assange's Swedish lawyer, Per Samuelsson, said his client plans to move to Ecuador because "it's the only nation where he is safe".

In Sweden, Assange's accuser was left stunned by the prosecutors' decision.

"It is a scandal that a suspected rapist can escape justice and thereby avoid the courts," her lawyer, Elisabeth Fritz, told AFP in an email.

"My client is shocked and no decision to (end the case) can make her change (her mind) that Assange exposed her to rape," she said.

The accusation against Assange dates from August 2010 when the alleged victim, who says she met him at a WikiLeaks conference in Stockholm a few days earlier, filed a complaint.

She accused him of having sex with her -- as she slept -- without using a condom despite repeatedly having denied him unprotected sex.

Assange always denied the allegations, which he feared would lead to him being extradited to the United States and facing trial over the leak of hundreds of thousands of secret US military and diplomatic documents in 2010, which brought WikiLeaks to prominence.